The layers are both broader and narrower. More broadly, regional patterns of industry clustering and supply chains have a tremendous influence on where projects locate, for example the “automobile corridors” from the Midwest/Mid-South into Mexico. More narrowly, localized talent and innovation clusters, for example Boston-Cambridge, are of global significance. The Boston region is booming from a location investment perspective in the biotech, education technology, and other knowledge-focused sectors, yet the state of Massachusetts does not show up on the top 25 list. Local factors, particularly as related to talent, infrastructure, and property availability, will often trump statewide business climate considerations. The following observations, though not intended to be comprehensive, offer additional context to the rankings:
Southern States such as Tennessee, Alabama, Kentucky, and Mississippi benefit from being in the center of the automobile and supplier chain and offer relatively low labor costs.
South-Central States such as Texas, Louisiana, and Oklahoma benefit from the strength of the energy sector. Texas also benefits from its many large and medium-sized metro areas that are attractive for investment from a scale and talent perspective.
Southeastern and Mid-Atlantic States such as Georgia, South Carolina, Florida, and North Carolina benefit from varying combinations of moderate to lower costs, proximity to Eastern and Midwest markets, East Coast ports, and established reputations as relocation destinations from the Northeast and Midwest, in particular.
The relative strengths of traditional manufacturing belt states such as Indiana, Ohio, Illinois, and Michigan are underpinned by localized skills, proximity to markets, big industry supply chains, and scale/density of labor markets among other factors. Illinois benefits from the relative strength of metro Chicago; Indiana from the attractiveness of the Indianapolis metro and its smaller cities; Ohio, by multiple metro areas that drive much of the investment; and Michigan by a strong skills base, regained strength in the automotive sector, and an improved business climate reputation.
In the West, California is fueled primarily by the strength of the Bay Area, San Diego, and Los Angeles and the strength of the state’s higher education system. Though ranked a bit lower on the list, Utah, Arizona, and Colorado benefit from in-migration growth, strong technology skills fueled by higher education resources and relocation appeal, and efficient customer servicing to West Coast markets.
In sum, while state-level factors are important, site selection decisions are driven more broadly by industry-specific customer ?and supplier dynamics as well as more narrowly by localized factors pertaining to clustering synergies, talent, labor market supply-demand, sites/buildings, infrastructure, and localized costs. States play an important role relative to incentive, tax and regulatory policy, long-term planning around education and infrastructure, and shaping a business open environment.
Top States For Doing Business 2015
- 3.South Carolina
- 7.North Carolina